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CiARRET KEIZER l:ALL:-; r o n A liENERAL :-;TRIKE
HARPER'S MAGAZINE/OCTOBER 2007
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DISASTER CAPITALISM
The New Economy of Catastrophe
By Naomi Klein
THE RIVER IS A ROAD
Searching for Peace in Congo
By Bryan Mealer
ADMIRAL
A story by T. C. Boyle
Also: John]. Sullivan and Wyatt Mason
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$6.9SUS $7.9SCAN
E S SAY
DISASTER
CAPITALISM
The new economy of catastrophe

By Naomi Klein
Only a crisis--actual or perceived-produces real change. When
that crisis occurs,
the actions that are taken depend on the ideas that are lying
around.
-Milton Friedman
Tee yearsago,when I wasin Bagh-
dad on assignment for this magazine, I paid an early-morning
visit to
Khadamiya, a mostly Shiite area. An Iraqi colleague had heard
that part of
the neighborhood had flooded the night before, as it did
regularly. When we
arrived, the streets were drenched in slick green-blue liquid that
was bub-
bling up from sewage pipes beneath exhausted asphalt. A family
invited us
to see what the frequent floods had done to their once lovely
home. The walls
were moldy and cracked, and every item-books, photos, sofas-
was caked
in the algae-like scum. Out back, a walled garden was a fetid
swamp, with a
child's swing dangling forlornly from a dead palm tree. "It was
a beautiful gar-
den," Durdham Yassin, the owner, told us. "I grew tomatoes."
For the frequent flooding, Yassin spread the blame around.
There was
Saddam, who spent oil money on weapons instead of
infrastructure during
the Iran-Iraq War. There was the first Gulf War, when U.S.
missiles struck

a nearby electricity plant, knocking out power to the sewage-
treatment fa-
cility. Next came the years of U.N. sanctions, when city
workers could not
replace crucial parts of the sewage system. Then there was the
2003 inva-
sion, which further fried the power grid. And, more recently,
there were com-
panies like Bechtel and General Electric, which were hired to
fix this mess,
and which failed.
Around the corner, a truck was idling with a large hose down a
manhole.
"The most powerful vacuum loader in the world," it advertised,
in English,
on its side. Yassin explained that the neighbors had pooled their
money to
pay the company to suck away the latest batch of sludge, a
costly and tem-
porary solution. The mosque had helped, too. As we drove
away, I noticed
that there were similar private vacuum trucks on every other
block.
Later that day I stopped by Baghdad's world-famous Green
Zone. There,
the challenges of living without functioning public
infrastructure are also
addressed by private actors. The difference is that in the Green
Zone, the
Naomi Klein's most recent article for Harper's Magazine,
"Baghdad Year Zero,"
appeared in the September 2004 issue. Her new book, The
Shock Doctrine, from

which this essay was adapted, was just published by
Metropolitan Books.
ESSAY 47
LIKE MOST PEOPLE, I THOUGHT
THE DMDE BETWEEN BAGHDAD'S
GREEN AND RED ZONES WAS A
SIMPLE BY-PRODUCT OF THE WAR
48 HARPER'S MAGAZINE I OCTOBER 2007
solutions actually work. The enclave has its own electrical grid,
its own phone
and sanitation systems, its own oil supply, and its own state-of-
the-art hos-
pital with pristine operating theaters-all protected by walls five
meters thick.
It felt, oddly, like a giant fortified Carnival Cruise ship parked
in the mid-
dle of a sea of violence and despair, the boiling Red Zone that
is Iraq. If you
could get on board, there were pools ide drinks, bad Hollywood
movies, and Nautilus machines. If you were not among the
E chosen, you could get shot just for standing too close tothe
wall.verywhere in Iraq, the wildly divergent values assigned to
dif-
ferent categories of people are on crude display. Westerners and

their
Iraqi colleagues have checkpoints at the entrances to their
streets, blast
walls in front of their houses, body armor, and private security
guards on
call at all hours. They travel the country in menacing armored
convoys,
with mercenaries pointing guns out the windows as they follow
their
prime directive to "protect the principal." With every move they
broad-
cast the same unapologetic message: We are the chosen, our
lives are in-
finitely more precious than yours. Middle-class Iraqis,
meanwhile, cling
to the next rung down the ladder: they can afford to buy
protection from
local militias, they are able to ransom a family member held by
kidnap-
pers, they may ultimately escape to a life of poverty in Jordan.
But the
vast majority of Iraqis have no protection at all. They walk the
streets
exposed to any possible ravaging, with nothing between them
and the
next car bomb but a thin layer of fabric. In Iraq, the lucky get
Kevlar; the
rest get prayer beads.
Like most people, I saw the divide between Baghdad's Green
and Red
zones as a simple by-product of the war: This is what happens
when the rich-
est country in the world sets up camp in one of the poorest. But
now, af-
ter years spent visiting other disaster zones, from post-tsunami

Sri Lanka
to post-Katrina New Orleans, I've come to think of these Green
Zone/Red
Zone worlds as something else: fast-forward versions of what
"free market"
forces are doing to our societies even in the absence of war. In
Iraq the
phones, pipes, and roads had been destroyed by weapons and
trade em-
bargoes. In many other parts of the world, including the United
States, they
have been demolished by ideology, the war on "big
government," the re-
ligion of tax cuts, the fetish for privatization. When that
crumbling infra-
structure is blasted with increasingly intense weather, the
effects can be as
devastating as war.
Last February, for instance, Jakarta suffered one of these
predictable disas-
ters. The rains had come, as they always do, but this time the
water didn't
drain out of Jakarta's famously putrid sewers, and half the city
filled up like a
swimming pool. There were mass evacuations, and at least fifty-
seven
people were killed. No bombs or trade sanctions were needed
for Jakarta's
infrastructure to fail-in fact, the steady erosion of the country's
public
sphere had taken place under the banner of "free trade." For
decades,
Washington-backed structural-adjustment programs had
pampered in-
vestors and starved public services, leading to such cliches of

lopsided de-
velopment as glittering shopping malls with indoor skating
rinks surround-
ed by moats of open sewers. Now those sewers had failed
completely.
In wealthier countries, where public infrastructure was far more
robust be-
fore the decline began, it has been possible to delay this kind of
reckoning.
Politicians have been free to cut taxes and rail against big
government even
as their constituents drove on, studied in, and drank from the
huge public-
works projects of the 1930s and 1940s. But after a few decades,
that trick stops
working. The American Society of Civil Engineers has warned
that the
United States has fallen so far behind in maintaining its public
infrastruc-
ture-roads, bridges, schools, dams-that it would take more than
a trillion
and a half dollars over five years to bring it back up to standard.
This past
summer those statistics came to life: collapsing bridges,
flooding subways, ex-
ploding steam pipes, and the still-unfolding tragedy that began
when New
Orleans's levees broke.
After each new disaster, it's tempting to imagine that the loss of
life and
productivity will finally serve as a wake-up call, provoking the

political class
to launch some kind of "new New Deal." In fact, the opposite is
taking
place: disasters have become the preferred moments for
advancing a vision
of a ruthlessly divided world, one in which the very idea of a
public sphere
has no place at all. Call it disaster capitalism. Every time a new
crisis hits-
even when the crisis itself is the direct by-product of free-
market ideology-
the fear and disorientation that follow are harnessed for radical
social and
economic re-engineering. Each new shock is midwife to a new
course of eco-
nomic shock therapy. The end result is the same kind of
unapologetic par-
tition between the included and the excluded, the protected and
the damned,
that is on display in Baghdad.
Consider the instant reactions to last summer's various
infrastructure dis-
asters. Four days after the Minneapolis bridge collapsed, a Wall
Stxeet low-
nal editorial had the solution: "tapping private investors to build
and oper-
ate public roads and bridges," with the cost made up from ever-
escalating tolls.
After heavy rain caused the shutdown of New York City's
subway lines, the
New Yark Sun ran an editorial under the headline "Sell the
Subways." It called
for individual train lines to compete against one another, luring
customers
with the safest, driest service-and "charging higher fares when

the competing
lines, stingier on their investments, were shut down with tracks
under wa-
ter."[ It's not hard to imagine what this free market in subways
would look
like: high-speed lines ferrying commuters from the Upper West
Side to Wall
Street, while the trains serving the South Bronx wouldn't just
continue
their long decay-they would simply drown.
The same week as the bridge collapse, hysteria erupted over
canceled
flights and delays at London's Heathrow airport, prompting The
Economist to
demand "radical reform" of the "grubby, cramped" facility.
London's airports
are already privatized, but now, according to the magazine, they
should be
deregulated, allowing terminals to compete against one another:
"different firms
could provide different forms of security checks, some faster
and dearer than
others." Meanwhile, in New Orleans, schools were getting ready
to reopen
for fall. More than half the city's students would be attending
newly mint-
ed charter schools, where they would enjoy small classes, well-
trained teach-
ers, and refurbished libraries, thanks to special state and
foundation funding
pouring into what the New York Times has described as "the
nation's pre-
eminent laboratory for the widespread use of charter schools."
But charters
are only for the students who are admitted to the system-an

educational
Green Zone. The rest of New Orleans's public-school students-
many of them
with special emotional and physical needs, almost all of them
African Amer-
ican-are dumped into the pre-Katrina system: no extra money,
overcrowded
classrooms, more guards than teachers. An educational Red
Zone.
Other institutions that had attempted to bridge the gap between
New Or-
leans's super-rich and ultra-poor were also under attack:
thousands of units
of subsidized housing were slotted for demolition, and Charity
Hospital, the
city's largest public-health facility, remained shuttered. The
original disaster
was created and deepened by public infrastructure that was on
its last legs; in
the years since, the disaster itself has been used as an excuse to
finish the job.
There will be more Katrinas, The bones of our states-so frail
and aging-
will keep getting buffeted by storms both climatic and political.
And as key
pieces of the infrastructure are knocked out, there is no
guarantee that they
1 If these solutions seemed to present themselves with uncanny
speed, it is largely because
Washington's think tanks have been on such an
aggressivecampaign to privatize the essential
functions of the state. As a May 2007 cover story in Business
Week explained, "In the

past year, banks and private investment firms have fallen in
love with public infrastructure.
They're smitten by the rich cashflows that roads, bridges,
airports, parking garagesand ship-
ping ports generate-and the monopolistic advantages that keep
those cash flows as steady
as a beating heart .... Investors can't get in fast enough."
Illustrations by John Ritter
EVERY TIME A NEW CRISIS HITS,
THE FEAR AND DISORIENTATION
THAT FOLLOW LEAD TO RADICAL
ECONOMIC RE-ENGINEERING
ESSAY 49
THE DISASTER-CAPITALISM
COMPLEX AIMS, ULTIMATELY, TO
REPLACE THE STATE WITH ITS
OWN PROFITABLE ENTERPRISES
will be repaired or rebuilt, at least not as they were before.
More likely, they
will be left to rot, with the well-off withdrawing into gated
communities, their
needs met by private suppliers.

Not so long ago, disasters were periods of social leveling, rare
moments when
atomized communities put divisions aside and pulled together.
Today they
are moments when we are hurled further apart, when we lurch
into a radi-
cally segregated future where some of us will fall off the map
and others as-
cend to a parallel privatized state, one equipped with well-
A paved highways and skyways, safe bridges, boutique
charterschools, fast-lane airport terminals, and deluxe
subways.Iraq and New Orleans both reveal, the markets opened
up by crises
aren't only the roads, schools, and oil wells; the disasters
themselves are ma-
jor new markets. The military-industrial complex that Dwight
D. Eisenhow-
er warned against in 1961 has expanded and morphed into what
is best un-
derstood as a disaster-capitalism complex, in which all conflict-
and
disaster-related functions (waging war, securing borders, spying
on citizens, re-
building cities, treating traumatized soldiers) can be performed
by corporations
at a profit. And this complex is not
satisfied merely to feed off the state,
the way traditional military contrac-
tors do; it aims, ultimately, to replace
core functions of government with its
own profitable enterprises, as it did in
Baghdad's Green Zone.

It happened in New Orleans.
Within weeks of Hurricane Katrina,
the Gulf Coast became a domestic
laboratory for the same kind of gov-
ernment run by contractors that was
pioneered in Iraq. The companies
that snatched up the biggest con-
tracts were the familiar Baghdad
gang: Halliburton's KBR unit re-
ceived a $60 million contract to re-
construct military bases along the
coast. Blackwater was hired to protect
FEMA operations, with the compa-
ny billing an average of $950 a day
per guard. Parsons, infamous for its
sloppy work in Iraq, was brought in
for a major bridge-construction proj-
ect in Mississippi. Fluor, Shaw, Bechtel, CH2M Hill-all top
contractors in
Iraq-were handed contracts on the Gulf Coast to provide mobile
homes to
evacuees just ten days after the levees broke. Their contracts
ended up total-
ing $3.4 billion, no open bidding required. To spearhead its
Katrina operation,
Shaw hired the former head of the U.S. Army's Iraq
reconstruction office. Flu-
or sent its senior project manager from Iraq to the flood zone.
"Our rebuild-
ing work in Iraq is slowing down, and this has made some
people available to
respond to our work in Louisiana," a company representative
explained. Joe
Allbaugh, whose company, New Bridge Strategies, had
promised to bring

Wal-Mart and 7-Eleven to Iraq, was the lobbyist in the middle
of many of the
deals. The feeling that the Iraq war had somehow just been
franchised was so
striking that some of the mercenary soldiers, fresh from
Baghdad, were hav-
ing trouble adjusting. When David Enders, a reporter, asked an
armed guard
outside a New Orleans hotel if there had been much action, he
replied, "Nope.
It's pretty Green Zone here."
Since then, privatized disaster response has become one of the
hottest in-
dustries in the South. Just one year after Hurricane Katrina, a
slew of new cor-
porations had entered the market, promising safety and security
should the
50 HARPER'S MAGAZINE / OCTOBER 2007 Source
photograph by FEMA News Photo
next Big One hit. One of the more ambitious ventures was
launched by a char-
ter air service in West Palm Beach, Florida. Help Jet bills itself
as "the world's
first hurricane escape plan that turns a hurricane evacuation into
a jet-setter
vacation." When a storm is coming, the charter company books
holidays for
its members at five-star golf resorts, spas, or Disneyland. With
the reservations
made, the evacuees are then whisked out of the hurricane zone
on a luxury

jet. "No standing in lines, no hassle with crowds, just a first
class experience
that turns a problem into a vacation .... Enjoy the feeling of
avoiding the usu-
al hurricane evacuation nightmare." For the people left behind,
there is a dif-
ferent kind of privatized solution. In 2006, the Red Cross signed
a new
disaster-response partnership with Wal-Mart. "It's all going to
be private en-
terprise before it's over," said Billy Wagner, chief of emergency
management
for the Florida Keys. "They've got the expertise. They've got the
resources."
He was speaking at the National Hurricane Conference in
Orlando, Florida,
a fast-growing annual trade show for the companies selling
everything that
might come in handy during the next disaster. Dave Blandford,
an exhibitor
showing off his "self-heating meals" at the conference,
observed: "Some folks
here said, 'Man, this is huge business-this is my new business.
I'm not in the
landscaping business anymore; I'm going to be a hurricane-
debris contractor.'''
Much of the parallel disaster economy has been built with
taxpayers' mon-
ey, thanks to the boom in privatized war-zone reconstruction.
The giant
contractors that have served as "the primes" in Iraq and
Afghanistan have spent
large portions of their income from government contracts on
their own cor-
porate overhead-between 20 and 55 percent, according to a 2006

audit of
Iraq contractors. Much of those funds has, quite legally, gone
into huge in-
vestments in corporate equipment, such as Bechtel's battalions
of earth
movers, Halliburton's fleets of planes and trucks, and the
surveillance archi-
tecture built by L-3, CACI, and Booz Allen. Most dramatic has
been Black-
water's investment in its paramilitary infrastructure. Founded in
1996, the com-
pany has used its steady stream of contracts to build up a
private army of 20,000
on-call mercenary soldiers and a military base in North Carolina
worth be-
tween $40 million and $50 million. It reportedly has the ability
to field mas-
sive humanitarian operations faster than the Red Cross, and
boasts a fleet of
aircraft ranging from helicopter gunships to a Boeing 767.2
Blackwater has been called "al Qaeda for the good guys" by its
right-wing
admirers. It's a striking analogy. Wherever the disaster-
capitalism complex
has landed, it has produced a proliferation of armed groups that
operate
outside the state. That is hardly a surprise: when countries are
rebuilt by people
who don't believe in governments, the states they build are
invariably weak,
creating a market for alternative security forces, whether
T Hezbollah, Blackwater, the Mahdi Army, or the gang downthe
street in New Orleans.he reach of the disaster industry extends

far beyond policing. When
the contractor infrastructure built up during the Bush years is
looked at as
a whole, what we see is a fully articulated state-within-a-state
that is as
muscular and capable as the actual state is frail and feeble. This
corporate
shadow-state has been built almost exclusively with public
resources, including
the training of its staff: 90 percent of Blackwater's revenues
come from state
contracts, and the majority of its employees are former
politicians, soldiers,
and civil servants. Yet the vast infrastructure is all privately
owned and
controlled. The citizens who funded it have absolutely no claim
to this
parallel economy or its resources.
2 One of the most alarming aspects of this industry is how
unabashedly partisan it is.
Blackwater, for instance, is closely aligned with the anti-
abortion movement and other
right-wing causes. It donates almost exclusively to the
Republican Party, rather than
hedging its bets like most big corporations. Halliburton sends
93 percent of its campaign
contributions to Republicans; Fluor, 78 percent. Is it far-fetched
to imagine a day when
political parties will hire these companies to spy on their rivals
during an election cam-
paign--or to engage in covert operations too shady even for the
CIA?
THE VAST INFRASTRUCTURE OF

THE DISASTER INDUSTRY, BUILT
UP WITH TAXPAYERS' MONEY, IS
ALL PRIVATELY CONTROLLED
ESSAY 51
THE COMPANIES AT THE HEART
OF THE DISASTER COMPLEX
INCREASINGLY SEE THE STATE AND
NONPROFITS AS COMPETITORS
52 HARPER'S MAGAZINE I OCTOBER 2007
The actual state, meanwhile, has lost the ability to perform its
core func-
tions without the help of contractors. Its own equipment is out
of date, and
the best experts have fled to the private sector. When Katrina
hit, FEMA had
to hire a contractor to award contracts to contractors. Similarly,
when it
came time to update the Army manual on the rules for dealing
with contractors,
the Army outsourced the job to one of its major contractors,
MPRI, because
it no longer had the in-house expertise. The CIA has lost so
many staffers to
the privatized spy sector that it has had to bar contractors from
recruiting in

the agency dining room. "One recently retired case officer said
he had been
approached twice while in line for coffee," reported the Los
Angeles Times.
And when the Department of Homeland Security decided it
needed to build
"virtual fences" on the U.S. borders with Mexico and Canada,
Michael P. Jack-
son, deputy secretary of the department, told contractors, "This
is an unusu-
al invitation .... We're asking you to come back and tell us how
to do our busi-
ness." The department's inspector general explained that
Homeland Security
"does not have the capacity needed to effectively plan, oversee,
and execute
the [Secure Border Initiative] program."
Under George W. Bush, the state still has all the trappings of a
govern-
ment-the impressive buildings, presidential press briefings,
policy
battles-but it no more does the actual work of govern-
T ing than the employees at Nike's Beaverton, Oregon,campus
stitch running shoes.he implications of the decision by the
current crop of politicians to
systematically outsource their elected responsibilities will reach
far beyond a
single administration. Once a market has been created, it needs
to be protected.
The companies at the heart of the disaster-capitalism complex
increasingly
regard both the state and nonprofits as competitors; from the
corporate per-

spective, whenever governments or charities fulfill their
traditional roles,
they are denying contractors work that could be performed at a
profit.
"Neglected Defense: Mobilizing the Private Sector to Support
Home-
land Security," a 2006 report whose advisory committee
included some of
the largest corporations in the sector, warned that "the
compassionate
federal impulse to provide emergency assistance to the victims
of disasters
affects the market's approach to managing its exposure to risk."
Published
by the Council on Foreign Relations, the report argued that if
people
know the government will come to the rescue, they have no
incentive to
pay for protection. In a similar vein, a year after Katrina, CEOs
from thir-
ty of the largest corporations in the United States joined
together under
the umbrella of the Business Roundtable, which includes in its
member-
ship Fluor, Bechtel, and Chevron. The group, calling itself
Partnership for
Disaster Response, complained of "mission creep" by the
nonprofit sector
in the aftermath of disasters. The mercenary firms, meanwhile,
have been
loudly claiming that they are better equipped than the U.N. to
engage in
peacekeeping in Darfur.
Much of this new aggressiveness flows from suspicion that the

golden era
of bottomless federal contracts might not last much longer. The
U.S. gov-
ernment is barreling toward an economic crisis, thanks in no
small part to
the deficit spending that has bankrolled the privatized disaster
economy.
Sooner rather than later, the contracts are likely to dip
significantly. In late
2006 defense analysts began predicting that the Pentagon's
acquisitions
budget could shrink by as much as 25 percent in the coming
decade.
When the disaster bubble bursts, firms such as Bechtel, Fluor,
and Black-
water will lose much of their primary revenue streams. They
will still have
all the high-tech equipment bought at taxpayer expense, but
they will need
to find a new business model, a new way to cover their high
costs. The next
phase of the disaster-capitalism complex is all too clear: with
emergencies
on the rise, government no longer able to foot the bill, and
citizens strand-
ed by their hollow state, the parallel corporate state will rent
back its disas-
ter infrastructure to whoever can afford it, at whatever price the
market
IMAGES OF PEOPLE STRANDED
ON ROOFTOPS IN NEW ORLEANS

FORESHADOW A COLLECfIVE
FUTURE OF DISASTER APARTHEID
54 HARPER'S MAGAZINE / OCTOBER 2007
will bear. For sale will be everything from helicopter rides off
rooftops to drink-
ing water to beds in shelters.
Wealth already provides an escape hatch from most disasters-it
buys
early-warning systems for tsunami-prone regions and stockpiles
ofTamiflu for
the next outbreak. It buys bottled water, generators, satellite
phones, and rent-
a-cops. During the Israeli attack on Lebanon in 2006, the U.S.
government
initially tried to charge American citizens for the cost of their
own evacua-
tion, though it was eventually forced to back down. If we
continue in this di-
rection, the images of people stranded on New Orleans rooftops
will not
only have been a glimpse of America's unresolved past of racial
inequality but
will also have foreshadowed a collective future of disaster
apartheid, in which
survival is determined primarily by one's ability to pay.
Perhaps part of the reason so many of our elites, both political
and corpo-
rate, are so sanguine about climate change is that they are
confident they will
be able to buy their way out of the worst of it. This may also

partially explain
why so many Bush supporters are Christian end-timers. It's not
just that they
need to believe there is an escape hatch from the world they are
creating. It's
that the Rapture is a parable for what they are building down
here
on Earth-a system that invites destruction and disaster, then
A swoops in with private helicopters and airlifts them and
theirfriends to divine safety.s contractors rush to develop
alternative stable sources of rev-
enue, one avenue of business is in disaster-proofing other
corporations. This
was Paul Bremer's line of work before he became Bush's
proconsul in Iraq: turn-
ing multinationals into security bubbles able to function
smoothly even if the
states in which they are doing business crumble around them.
The early re-
sults can be seen in the lobbies of many office buildings in New
York or Lon-
don-airport-style check-ins complete with photo-H)
requirements and x-
ray machines-but the industry has far greater ambitions,
including privatized
global communications networks, emergency health and
electricity services,
and the ability to locate and provide transportation for a global
workforce in
the midst of a major disaster. Another potential growth area
identified by the
disaster-capitalism complex is municipal government: the
contracting out of
police and fire departments to private security companies.

"What they do for
the military in downtown Fallujah, they can do for the police in
downtown
Reno," a spokesperson for Lockheed Martin said in November
2004.
The contracting industry predicts that these new markets will
expand dra-
matically over the next decade. A frank vision of where these
trends are
leading is provided by John Robb, a former covert-action
mission comman-
der with Delta Force turned management consultant. In a widely
circulated
manifesto for Fast Company magazine, he describes the "end
result" of the war
on terror as "a new, more resilient approach to national security,
one built not
around the state but around private citizens and companies ....
Security will
become a function of where you live and whom you work for,
much as health
care is allocated already."
Robb writes, "Wealthy individuals and multinational
corporations will be
the first to bail out of our collective system, opting instead to
hire private mil-
itary companies, such as Blackwater and Triple Canopy, to
protect their
homes and facilities and establish a protective perimeter around
daily life. Par-
allel transportation networks--evolving out of the time-share
aircraft com-
panies such as Warren Buffett's NetJets-will cater to this group,
leapfrog-

ging its members from one secure, well-appointed lily pad to
the next." That
elite world is already largely in place, but Robb predicts that
the middle class
will soon follow suit, "forming suburban collectives to share the
costs of se-
curity." These "'armored suburbs' will deploy and maintain
backup genera-
tors and communications links" and be patrolled by private
militias "that have
received corporate training and boast their own state-of-the-art
emergency
response systems."
In other words, a world of suburban Green Zones. As for those
outside the
secured perimeter, "they will have to make do with the remains
of the national
system. They will gravitate to America's cities, where they will
be subject to
ubiquitous surveillance and marginal or nonexistent services.
For the poor,
there will be no other refuge." The future Robb describes
sounds very much
like the present in New Orleans, where two very different kinds
of gated
communities emerged from the rubble. On the one hand were
the so-called
FEMA-villes: desolate, out-of-the-way trailer camps for low-
income evacuees,
built by Bechtel or Fluor subcontractors and administered by
private securi-
ty companies that patrolled the gravel lots, restricted visitors,

kept journal-
ists out, and treated survivors like criminals. On the other hand
were the gat-
ed communities built in the wealthy areas of the city like
Audubon and the
Garden District, bubbles of functionality that seemed to have
seceded from
the state altogether. Within weeks of the storm, residents there
had water and
powerful emergency generators. Their sick were treated in
private hospitals,
and their children went to private or charter schools. And they
had no need
for public transit. In St. Bernard Parish, a New Orleans suburb,
DynCorp had
taken over much of the policing; other neighborhoods hired
security companies
directly. Between the two kinds of privatized city-states was the
New Orleans
version of the Red Zone, where the murder rate soared and
A neighborhoods like the storied Lower Ninth Ward descend-ed
into a postapocalyptic no-man's-land.nother glimpse of a
disaster-apartheid future can be found in a
wealthy Republican suburb outside Atlanta. Its residents
decided that they
were tired of watching their property taxes subsidize
schools and police in the county's low-income
African-American neighborhoods. They voted to in-
corporate as their own city, Sandy Springs, which
could spend most of its taxes on services for its
100,000 citizens and minimize the revenue that
would be redistributed throughout Fulton County.
The only difficulty was that Sandy Springs had no
government structures and needed to build them

from scratch-everything from tax collection to
zoning to parks and recreation. In September 2005,
the same month that New Orleans flooded, the res-
idents of Sandy Springs were approached by the
construction and consulting giant CH2M Hill with
a unique pitch: Let us do it for you. For the starting
price of $27 million a year, the contractor pledged
to build a complete city from the ground up.
A few months later, Sandy Springs became the
first "contract city." Only four people worked di-
rectly for the new municipality--everyone else was
a contractor. Rick Hirsekorn, heading up the proj-
ect for CHZM Hill, described Sandy Springs as "a
clean sheet of paper with no governmental process-
es in place." The Atlanta Journal-Constitution re-
ported that "when Sandy Springs hired corporate
workers to run the new city, it was considered
a bold experiment." Within a year, however,
contract-city mania was tearing through Atlanta's
wealthy suburbs, and it had become "standard pro-
cedure in north Fulton [County]." Neighboring communities
took their cue
from Sandy Springs and also voted to become stand-alone cities
and contract
out their government. One new city, Milton, immediately hired
CH2M Hill
for the job-after all, it had the experience. Soon, a campaign
began for the
new corporate cities to join together to form their own county.
The plan has
encountered fierce opposition outside the proposed enclave,
where politicians
say that without those tax dollars, they will no longer be able to
afford their

OUTSIDE THE WEALTHY SUBURBS,
THE NEW ORLEANS VERSION OF
THE RED ZONE RESEMBLED A POST-
APOCALYPTIC NO-MAN'S-LAND
ESSAY 55
IT WAS FORMERLY BELIEVED THAT
GENERALIZED MAYHEM WAS A
DRAIN ON THE GLOBAL ECONOMY.
THAT TRUISM IS NO LONGER TRUE
large public hospital and public transit system; that partitioning
the county
would create a failed state on the one hand and a hyperserviced
one on the
other. What they were describing sounded a lot like New
Orleans and a lit-
tle like Baghdad.
In these wealthy Atlanta suburbs, the long crusade to strip-mine
the
state is nearing completion, and it is particularly fitting that the
new ground
was broken by CH2M Hill. The corporation was a multimillion-
dollar con-
tractor in Iraq, paid to perform the core government function of

oversee-
ing other contractors. In Sri Lanka after the tsunami, it not only
had built
ports and bridges but was, according to the U.S. State
Department, "re-
sponsible for the overall management of the infrastructure
program." In post-
Katrina New Orleans, CH2M Hill was awarded $500 million to
build
FEMA-villes and was put on standby for the next disaster. A
master of pri-
vatizing the core functions of the state during extraordinary
circumstances,
the company was now doing the same under ordinary ones.
Elf disasters had served as laboratories of extreme
privatization,the testing phase was clearly over.or decades, the
conventional wisdom was that generalized mayhem was
a drain on the global economy. Individual shocks and crises
could be har-
nessed as leverage to force open new markets, of course, but
after the initial
shock had done its work, relative peace and stability were
required for sus-
tained economic growth. That was the accepted explanation for
why the
Nineties had been such prosperous years: with the Cold War
over, economies
were liberated to concentrate on trade and investment, and as
countries be-
came more enmeshed and interdependent, they were far less
likely to bomb
one another.
At the 2007 World Economic Forum in Davos, Switzerland,

however, po-
litical and corporate leaders were scratching their heads over a
state of af-
fairs that seemed to flout this conventional wisdom. It was
being called the
"Davos Dilemma," which Financial Times columnist Martin
Wolf described
as "the contrast between the world's favourable economics and
troublesome
politics." As Wolf put it, the economy had faced "a series of
shocks: the stock
market crash after 2000; the terrorist outrages of September 11,
2001; wars
in Afghanistan and Iraq; friction over US policies; a jump in
real oil prices
to levels not seen since the 1970s; the cessation of negotiations
in the
Doha round [ofWTO talks]; and the confrontation over Iran's
nuclear am-
bitions"-and yet it found itself in "a golden period of broadly
shared growth."
Put bluntly, the world was going to hell, there was no stability
in sight, and
the global economy was roaring its approval.
This puzzling trend has also been observed through an economic
indica-
tor called "the guns-to-caviar index." The index tracks the sales
of fighter jets
(guns) and executive jets (caviar). For seventeen years, it
generally found that
when fighter jets were selling briskly, sales of luxury executive
jets went
down, and vice versa: when executive-jet sales were on the rise,
fighter-jet sales
dipped. Of course, a handful of war profiteers always managed

to get rich from
selling guns, but they were economically insignificant. It was a
truism of the
contemporary market that you couldn't have booming economic
growth in
the midst of violence and instability.
Except that the truism is no longer true. Since 2003, the year of
the Iraq
invasion, the index has found that spending has been going up
on both fight-
er jets and executive jets rapidly and simultaneously, which
means that the
world is becoming less peaceful while accumulating
significantly more prof-
it. The galloping economic growth in China and India has
played a part in
the increased demand for luxury items, but so has the expansion
of the nar-
row military-industrial complex into the sprawling disaster-
capitalism com-
plex. Today, global instability does not just benefit a small
group of arms
dealers; it generates huge profits for the high-tech-homeland-
security sector,
for heavy construction, for private health-care companies, for
the oil and gas
sectors-and, of course, for defense contractors.
The scale of the revenues at stake is certainly enough to fuel an
eco-
nomic boom. Lockheed Martin, whose former vice president
chaired the Com-
mittee for the Liberation of Iraq, which loudly agitated for the

invasion, re-
ceived $25 billion in U.S. government contracts in 2005 alone.
Democratic
Congressman Henry Waxman noted that the sum "exceeded the
gross do-
mestic product of 103 countries, including Iceland, Jordan, and
Costa Rica
... [and] was also larger than the combined budgets of the
Department of Com-
merce, the Department of the Interior, the Small Business
Administration,
and the entire legislative branch of government." Lockheed
itself deserved
to be characterized as an emerging market. Companies like
Lockheed (whose
stock price tripled between 2000 and 2005) are a large part of
the reason why
the U.S. stock market was saved from a prolonged crash
following Septem-
ber 11. While conventional stocks have underperformed, the
Spade De-
fense Index, "a benchmark for defense, homeland security and
aerospace
stocks," went up 76 percent between 2001 and 2006-while
Standard & Poor's
500 average dropped 5 percent in that same period.
The Davos Dilemma is being fueled further by the intensely
profitable mod-
el of privatized reconstruction that was forged in Iraq. Share
prices of heavy-
construction companies, which include the big engineering
firms that land
juicy no-bid contracts after wars and natural disasters, went up
300 percent
between 2001 and July 2007. Reconstruction is now such big

business that
investors greet each new disaster with the excitement of hot
initial public
stock offerings: $30 billion for Iraq reconstruction, $ 13 billion
for tsunami
reconstruction, $110 billion for New Orleans and the Gulf
Coast, $7.6 bil-
lion for Lebanon.
Terrorist attacks, which used to send the stock market spiraling
downward,
now receive a similarly upbeat market reception. After
September 11, 2001,
the Dow Jones plummeted 685 points as soon as markets
reopened. In sharp
contrast, on July 7, 2005, the day four bombs ripped through
London's pub-
lic transportation system, killing dozens and injuring hundreds,
the U.S.
stock market closed higher than it had the day before, with the
Nasdaq up
7 points. A year later, on the day British law-enforcement
agencies arrested
twenty-four suspects who had allegedly planned to blow up
jetliners headed
to the United States, the Nasdaq closed 11.5 points higher,
largely thanks to
soaring homeland-security stocks.
Then there are the outrageous fortunes of the oil sector-a $40
billion
profit in 2006 for ExxonMobil alone, the largest profit ever
recorded, and its
colleagues at rival companies like Chevron were not far behind.
Like the for-
tunes of corporations linked to defense, heavy construction, and

homeland se-
curity, those of the oil sector improve with every war, terrorist
attack, and Cat-
egory 5 hurricane. In addition to reaping the short-term benefits
of high prices
linked to uncertainty in key oil-producing regions, the oil
industry has con-
sistently managed to tum disasters to its long-term advantage,
whether by en-
suring that a large portion of the reconstruction funds in
Afghanistan went in-
to the expensive road infrastructure for a new pipeline (while
most other
major reconstruction projects stalled), or by pushing for a new
investor-friend-
ly oil law in Iraq while the country burned, or by piggybacking
on Hurricane
Katrina to plan the first new refineries in the United States
since the Seven-
ties. The oil and gas industry is so intimately entwined with the
economy of
disaster-both as a root cause behind many disasters and as a
T beneficiary from them-that it deserves to be treated as
anhonorary adjunct of the disaster-capitalism complex.he recent
spate of disasters has translated into such spectacular prof-
its that many people around the world have come to the same
conclusion: the
rich and powerful must be deliberately causing the catastrophes
so that they
can exploit them. In July 2006, a national poll of U.S. residents
found that
more than a third of respondents believed that the government
had a hand
in the 9/11 attacks or took no action to stop them "because they

wanted the
United States to go to war in the Middle East." Similar
suspicions dog most
TERRORIST ATTACKS, WHICH
USED TO SEND THE STOCK
MARKET SPIRALING DOWNWARD,
NOW ENJOY UPBEAT RECEPTIONS
ESSAY 57
THE CREEPING EXPANSION OF
THE DISASTER INDUSTRY INTO THE
MEDIA MAY PROVE TO BE A NEW
KIND OF CORPORATE SYNERGY
of the catastrophes of recent years. In Louisiana in the
aftermath of Katrina,
the shelters were alive with rumors that the levees hadn't broken
but had been
covertly blown up in order to keep the rich areas dry while
cleansing the city
of poor people. In Sri Lanka, I often heard that the tsunami had
been caused
by underwater explosions detonated by the United States so that
it could send

troops into Southeast Asia and take full control over the
region's economies.
The truth is at once less sinister and more dangerous. An
economic sys-
tem that requires constant growth while bucking almost all
serious attempts
at environmental regulation generates a steady stream of
disasters all on its
own, whether military, ecological, or financial. The appetite for
easy, short-
term profits offered by purely speculative investment has turned
the stock,
currency, and real estate markets into crisis-creation machines,
as the Asian
financial crisis, the Mexican peso crisis, the dot-com collapse,
and the
subprime-mortgage crisis demonstrate. Our common addiction
to dirty, non-
renewable energy sources keeps other kinds of emergencies
coming: natur-
al disasters (up 560 percent since 1975) and wars waged for
control over scarce
resources (not just Iraq and Afghanistan but lower-intensity
conflicts such
as those in Colombia, Nigeria, and Sudan), which in turn spawn
terrorist blow-
back (a 2007 study calculated that the number of terrorist
attacks has increased
sevenfold since the start of the Iraq war).
Given the boiling temperatures, both climatic and political,
future disas-
ters need not be cooked up in dark conspiracies. All indications
are that if
we simply stay the current course, they will keep coming with

ever more fe-
rocious intensity. Disaster generation can therefore be left to
the market's
invisible hand. This is one area in which it actually delivers.
The disaster-capitalism complex does not deliberately scheme to
create
the cataclysms on which it feeds (though Iraq may be a notable
exception),
but there is plenty of evidence that its component industries
work very hard
indeed to make sure that current disastrous trends continue
unchallenged. Large
oil companies have bankrolled the climate-change-denial
movement for years;
ExxonMobil alone has spent an estimated $19 million on the
crusade over the
past decade. Although the phenomenon is well known, the
interplay between
disaster contractors and elite opinion makers is far less
understood. Several in-
fluential Washington think tanks-including the National
Institute for Pub-
lic Policy and the Center for Security Policy-are heavily funded
by weapons
and homeland-security contractors, which profit directly from
these insti-
tutes' ceaseless portrayal of the world as a dark and menacing
place, its trou-
bles responsive only to force. The homeland-security sector is
also becoming
increasingly integrated with media corporations, a development
that has Or-
wellian implications. In 2004 the digital-communications giant
LexisNexis paid
$775 million for Seisint, a data-mining company that works

closely on sur-
veillance with federal and state agencies. That same year,
General Electric,
which owns NBC, purchased InVision, the major producer of
controversial high-
tech bomb-detection devices used in airports and other public
spaces.
InVision received a staggering $15 billion in homeland-security
contracts be-
tween 2001 and 2006, more of such contracts than any other
company.
The creeping expansion of the disaster-capitalism complex into
the media
may prove to be a new kind of corporate synergy, one building
on the verti-
cal integration that became so popular in the Nineties. It
certainly makes sound
business sense. The more panicked our societies become,
convinced that
there are terrorists lurking in every mosque, the higher the news
ratings soar,
the more biometric lOs and liquid-explosive-detection devices
the complex
sells, and the more high-tech fences it builds. If the dream of
the open, bor-
derless "small planet" was the ticket to profits during the
Clinton years, the
nightmare of the menacing, fortressed Western continents,
under siege from
jihadists and illegal immigrants, plays the same role in the new
millennium.
There is only one cloud that looms over the thriving disaster
economy-
from weapons to oil to engineering to surveillance to patented

drugs. It is the
threatening if unlikely scenario that this latest boom could
somehow be in-
terrupted by an outbreak of climatic stability and geopolitical
peace. -
Page 1ImagesImage 1Image 2Image 3Page 1TitlesDISASTER
The new economy of catastrophe Page 1Page 1ImagesImage
1Page 1ImagesImage 1Page 1Page 1Page 1Page 1ImagesImage
1Page 1Page 1Page 1ImagesImage 1Image 2
Naomi Klein's book The Shock Doctrine reveals how those who
support free market economies use shock, or moments of urban
disaster, to capitalize off the disaster and expand private
economic interests. These disasters open new
markets/investment opportunities, and those who capitalize off
of these opportunities have unlimited funds to support their
endeavors (such as using public taxpayer funds for private, free
market expansion). This process isn't a question of a vast
conspiracy. In most cases destructive events--or shocks--aren't
being planned so they can be exploited (although it's been well
documented how the War in Iraq was planned to create "shock
and awe," and new capitalized markets were subsequently
opened). There are in fact economic organizations who have
plans private investment plans in place that can be easily
utilized when a crisis just happens--such as replacing public
school funding with school voucher systems (charters),
privatization of what used to be public housing for low income
urbanites, etc.
Here is a video of Klein discussing this phenomenon:
https://www.youtube.com/watch?v=JG9CM_J00bw
There are a lot of videos of Klein on YouTube if you're
interested in watching more.
"The vast infrastructure of the disaster industry, built up with
taxpayers' money, is all privately controlled."

This is one of the isolated quotations from Naomi Klein's article
"Disaster Capitalism" published in a 2007 issue of Harper's
Magazine. Klein's purpose in this article is to demonstrate how
city re-building after catastrophic events or "shocks"--such as
natural disaster, war, or even urban decay--has become a major
industry. The private sector, she has learned, takes advantage of
the public funds channeled into restoring urban areas, gaining
massive contracts and making huge profits off the loss and
destruction. At the same time, these private companies work in
concert with governments (local, state, even federal) to rebuild
communities in a way that discourages those from low income
and often multiracial backgrounds to remain.
Consider this section of the text:
"...disasters have become the preferred moments for advancing a
vision of a ruthlessly divided world, one in which the very idea
of a public sphere has no place at all. Call it disaster capitalism.
Every time a new crisis hits--even when the crisis itself is the
direct by-product of free-market ideology--the fear and
disorientation that follow are harnessed for radical social and
economic re-engineering. Each new shock is midwife to a new
course of economic shock therapy. The end result is the same
kind of unapologetic partition between the included and the
excluded, the protected and the damned..."
1. In your discussion post this week, begin by telling us what
you think the title of Klein's article means and the main
argument she's trying to relay in this article.
2. Then, provide a detailed example from the text of how
disaster capitalism has worked to create divided or even
homogenous cities. Focus on 1-2 cities and give specific
examples of how this happened. You can use a quote from the
text to support your point.
3. Thinking about tax money might not seem related to a class
on urban theory. But as you know, your professor always
believes in following the economic indicators to best understand
how cities are really shaped and who they support. What is
Klein's critique about the division between who obtains

taxpayer money to rebuild urban communities and the lack of
opportunity citizens (i.e. taxpayers) have to shape how their
cities are rebuilt? Remember, taxpayers are typically middle to
lower income--those with the most money have tons of lawyers
to help them avoid paying their share of taxes based on income
(this is the main reason people have asked to see Trump's tax
records)!

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